Medicare subvention : a case analysis of reimbursement issues affecting TRICARE Senior Prime at Naval Medical Center, San Diego

Abstract

Medicare-eligible military beneficiaries have experienced difficulty accessing the Military Health System. To help alleviate this problem, a three- year demonstration project known as Medicare Subvention has been implemented creating a Department of Defense Health Maintenance Organization called TRICARE Senior Prime (TSP). This research determined the financial impact of TSP at Naval Medical Center, San Diego (NMCSD). The financial analysis includes an examination of inpatient and outpatient costs and revenues for Fiscal Year (FY) 1999. The results of this research show that TSP indirectly caused a net reduction. in operating costs at NMCSD in FY 1999 of $ 1.5 million or one percent of the operating budget. The program caused revenues to decline by causing a 20 percent reduction in admissions for non-TSP beneficiaries with other health insurance. Proportionally larger cost reductions resulted from this decrease in non-TSP admissions that outweighed increases in TSP admissions.